1. What is the ANZ Borrowing Calculator?

The ANZ Borrowing Calculator helps estimate how much you might be able to borrow for a home loan based on your affordable monthly repayments, current interest rates, and loan term.

2. How Does the Calculator Work?

The calculator uses the present value of an annuity formula:

Where:

• \( P \) — Principal amount (maximum borrowing capacity)
• \( PMT \) — Affordable monthly payment
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (term in years × 12)

Explanation: The formula calculates the lump sum (P) that could be repaid with regular payments (PMT) over the loan term at the given interest rate.

3. Importance of Borrowing Capacity

Details: Understanding your borrowing capacity helps in home buying planning, setting realistic budgets, and loan pre-approval processes.

4. Using the Calculator

Tips: Enter your comfortable monthly repayment amount, current interest rate (ANZ's standard variable rate is pre-filled), and desired loan term. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does this include other loan costs?
A: No, this calculates principal only. Additional costs like fees, LMI, and stamp duty should be considered separately.

Q2: What's ANZ's current standard variable rate?
A: As of 2024, ANZ's standard variable rate is approximately 6.54% p.a., but check their website for current rates.

Q3: How does loan term affect borrowing capacity?
A: Longer terms increase borrowing capacity but result in more interest paid over the life of the loan.

Q4: What other factors affect actual borrowing power?
A: Lenders consider income, expenses, credit history, existing debts, and living expenses when assessing loans.

Q5: Is this calculation accurate for interest-only loans?
A: No, this formula is for principal-and-interest loans. Interest-only calculations are different.